Daily Forex Market Preview, 29/06/2017
The central banking chiefs from the European Central bank, the Bank of England and the Bank of Canada spoke yesterday. Surprising with hawkish comments, the US dollar slipped as the euro, the British pound and the Canadian dollar rose sharply.
Central bankers suggestions that reducing the stimulus program sent the respective yields falling while the currencies appreciated. The Canadian dollar also got a boost from rising oil prices following the EIA report.
BoE’s Carney said that an interest rate hike was required noting that this would be discussed in the upcoming meetings. Meanwhile, the BoC Governor, Poloz said that the rate cuts in 2015 did their job and that the central bank will consider its options in terms of the excess capacity being used.
Looking ahead, the US final GDP numbers will be coming out today, but no major changes are expected, with GDP expected to remain steady at 1.2%.
EURUSD intraday analysis
EURUSD (1.1398): The EURUSD continued to the upside closing at 1.1376. The exchange rate briefly fell after rumors emerged from the ECB that Draghi’s comments were misjudged. EURUSD fell to 1.1300 on the day before pulling back to close higher. In the near term, if the upside continues, EURUSD could be seen slipping back to 1.1357. This marks the resistance level high from August 2016. Establishing support here could signal further continuation. However, expect to see some weakness with the sideways range being formed at 1.1357 – 1.1300.
GBPUSD intraday analysis
GBPUSD (1.2954): The British pound rose steadily breaking past the 1.2800 resistance level. Any declines could be limited to this level which could now act as support. Price action is seen reaching towards 1.2970 minor resistance level from May this year. In the near term, GBPUSD could see a pullback that could potentially see price action test the support at 1.2800, as seen on the 4-hour chart. A breakout above 1.2976 will, however, require further upside in GBPUSD with the potential to reach out above 1.3000.
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USDJPY intraday analysis
USDJPY (112.10): USDJPY managed to break past the resistance and yesterday’s price action also closed above this level. However, the price action suggests that we could see some downside unless today’s daily close is above the recent highs at 112.46. On the 4-hour chart, the bullish flag pattern remains in play. Following the initial target at 112.43, USDJPY will be seen testing the next main target level at 113.36.